Chapter 3 Material1. Meyer industries have $750 million of common equity on the balance sheet; a stock price of $50 per share, MVA of $175 million. How many common shares are currently outstanding?2. Wiebold Inc. has sales of 15,000,000,000 COGS of 8,000,000,000 Depreciation/Amortization Expense of 4,000,000,000 Interest Expense of 1,300,000,000 And Tax Expense of 40%. It’s total operating capital is $20 billion, and its total after tax dollar cost of operating capital is $2 billion. During the year, they invested 1.3 billion in net operating capital. What is NOPAT?What is net cash flow?What is operating cash flow?What is its free cash flow?What is its EVA?3. Define capital gains and tax loss carry back/carry forward.4. What is a progressive tax rate?5. If a company’s NOPAT was 114,247, after tax % cost of capital was 10%, and total operating capital was 1,187,200, what is their EVA?Chapter 5 Material1. What are the three levels of market efficiency?2. What does the efficient market hypothesis state?3. When a manager wants to raise money and the market price of stock is greater than the value, what will he/she do? What if the market price is less than the value?Chapter 6 Material1. What four factors affect the level of interest rates?2. Complete the following chart, showing which types of securities have which risk premiums.InflationPremiumMaturity Risk PremiumDefault Risk PremiumLiquidity PremiumST TreasuryLT TreasuryST CorporateLT Corporate3. 30 Day T Bills are currently yielding 5.5% The following are interest rate premiums.IP: 3.5%LP: 0.8%MRP: 1.75%DRP: 2.45%Using the same information, what would 5 year corporate bonds yield?4. Interest rates on 4 year Treasury securities are currently 6.5%. 6 year Treasury Securities yield 7%. If the pure expectation theory is correct, what does the market believe that 2 year securities will be yielding 4 years from now?5. The real risk free rate r* is 3%. Inflation is expected to be 2.5% each year for the next 3 years after which it will increase to 3.65% peryear. MRP is 0. A 7 year corporate bond has a yield of 8.5% which includes a liquidity premium of 1%. What is the default risk premium?Chapter 71. Match the following terms with their correct definition.Par Value A. Date at which the bond was issuedCoupon Interest Rate B. Rate of return earned on a bond held until maturityMaturity Date C. Face amount of the bond, which is paid at maturity Issue Date D. Date at which the bond must be repaidYield to Maturity E. Stated interest rate paid by theissuer (par * %)= annual coupon pmt2. What is a call provision? 3. A bond has 10 years remaining to maturity. Interest is paid annually, and they have $1,000 par. The coupon interest rate is 9%and the yield to maturity is 10%. What is the bond’s current market price?4. A bond has a $1000 par value, 8 years to maturity, and 8% annual coupon. It sells for $975What is its current yield? 5. A semi annual bond matures in 8 years and sells for $1050. It has a face value of 1000, and yield to maturity of 10.45%. What is its current yield?6. 6 years ago, a company issued 20 year bonds with 14% annual coupon rate at 1000 par value. The bonds had a 9% call premium with 5 years of call protection. Today, they called the bonds. Compute the rate of return for an investor who purchased the bonds when they were issued and held them until they were called.7. Would you rather buy a 10 year 10% annual coupon bond or a 10 year, 10% semiannual coupon bond, all else equal?8. Would firms rather file for Chapter 11 or Chapter 7 Bankruptcy?